You may well ask. The phrase came up recently on a TV programme about the delights of Scarborough – where else?
What happens is that after all of the fixed costs of running the borough – the stuff you have to do, come hell or high water – the council opens up what’s left over to bids by interested parties.
Candidates might be as diverse as youth clubs, transport options, arts projects – anything that local people have an interest in and are prepared to do the work to deliver, if the council were to provide the funds.
All the bidders set up stands at some large local venue to promote their interests, and all voting members of the public are invited to go and give them the once-over.
Having done so, they can then vote for their preferred options in order of priority, and the council abides by the democratic vote, and spends the funds available on those projects which get the majority vote.
And that’s called discretionary budgeting. Pretty neat, I thought, and a better example of localism mixed with true democracy you’d be hard pressed to find.
Which got me thinking that there are lessons here, maybe, for the way many businesses are run. Not the one- and two-man bands that constitute the vast majority of small businesses, but those with a reasonable payroll and ambitious growth plans.
And how might all that work, I hear you ask cynically?
Most businesses are run (if you’re lucky) as benevolent dictatorships, usually in the form of a hierarchical autocracy. Sorry, too many long words.
Basically, the guy(s) at the top who own most if not all of the equity call all the shots. They decide the objectives, the strategy, the direction, the tactics, and give out a lot of orders to get them achieved.
The larger corporates have tiers of middle management (far too many, some would argue) who have a say in the tactics and are responsible for delivery, but not much else.
And if you’ve had to put your house on the line to get the bank to give you a measly overdraft facility or loan, to get the business started in the first place or to keep it growing subsequently (I have personal experience, in case you’re wondering), I can see why the key decision-making is kept on a pretty tight rein.
But are all those autocrats missing a trick, and could participatory budgeting (see left-hand column for details) have some useful lessons? I’m not saying businesses should be run as democracies, but I am suggesting that the word ‘participatory’ could be used to good effect in achieving your business objectives.
There is an old saying that you cannot expect anyone to help you get to your destination if they don’t know where it is you’re trying to get to. Basic communication, not only of the business’s objectives, strategies for growth and current performance is fundamental to motivating staff, not just to do the job they’re paid to do, but to go the extra mile to achieve better things.
Having a management style that welcomes debate, ideas and even criticism is also more likely to foster effective team-work than those who equate managing with giving orders – a surprisingly large proportion of middle managers in larger organisations, I find, sadly.
There used to be a thing called the ‘Suggestions Box’, which invited ideas for improving business performance – and there are a few enlightened employers who still use it, and make substantial payments to those who post ideas, if and when taken up, make or save the business significant sums of money.
I would argue that this is the principle of participatory budgeting put into practical form in a business environment, and that it will have a positive impact on results. If people feel part of something, if they feel that any additional contribution they make, above and beyond their basic job description, is appreciated – and ideally recognised financially in some way – then you’re well on the way to building a team that will help you achieve all your objectives, business and personal, and more.
If you still think it’s your right, as owner and risk taker, to call all the shots, take no advice, and act as Mr Shouty whenever the bad mood takes you, then the chances are your business, even if somehow profitable, will be massively under-performing its true potential.
David Croydon: 01844 238692 or e-mail email@example.com